Business Directories

Australian budget airline grounds fleet

Sydney, February 18, 2012

Thousands of travellers from Hawaii to Thailand were stranded on Friday after budget airline Air Australia ran out of money and went into voluntary administration, immediately grounding its five-jet fleet.

The Brisbane-based international and domestic airline, formerly known as Strategic Airlines, said all flights had been cancelled and the airline would not be accepting new bookings because it could no longer pay its bills.

Voluntary administration in Australia is similar to bankruptcy protection in the US, and can buy a company time to trade out of its financial problems.

More than 4,000 passengers were overseas with Air Australia round-trip tickets, voluntary administrator Mark Korda said. Some of those affected were stranded in Honolulu and Phuket, Thailand.

Australian airline Qantas and Jetstar, its budget subsidiary, were considering adding services to help stranded passengers get to their destinations.

Qantas will sell stranded passengers tickets for the same price they paid for their Air Australia tickets, giving them a chance to recover the full price from their travel agencies or credit card companies.-Reuters